Microeconomics: Principles, Problems, & Policies, 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0077660811
ISBN 13: 978-0-07766-081-9

Chapter 17 - Natural Resource and Energy Economics - Discussion Questions - Page 402: 6

Answer

The answer is below.

Work Step by Step

By reducing the cost of extracting the energy, there are two possibilities: more affordable energy or higher profit for the power companies. However, the latter is more likely as extractable sources like coal and oil are already cheaper than many other sources by a fair amount.
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